Buying- Multiple Offers

It is important to remember that the more competition there is for the house, the higher the offers will be. Usually exceeding the asking price. When there are multiple offers, we most times will NOT know the amount of the other offers. The listing agent will usually set a deadline for everyone to submit their highest and best offer.

There are various strategies to winning in multiple offer situations. Some involve playing off emotions and others play off strength of the terms. Each situation is unique and requires a unique solution.

Some of the more unique strategies that we’ve used in the past include thing such as these:

  1. Escalation Clause. You offer to pay $10,000 higher than any other offer up to a maximum dollar amount. An example of this would be we offer $475,000 and will pay $10,000 higher than other offers to a maximum of $525,000.
  2. Appraisal Guarantee Clause. When paying 15% higher than the list price, the seller will be concerned that the appraisal won’t be at value. If the appraisal comes in lower than the sale price, the bank will not give you a loan higher than what the house was appraisal for. Using this clause, buyers are agreeing to coming up with the difference in separate funds. This would be stated as follows: Buyer will cover any appraisal gap, or buyer will cover up to $25,000 of appraisal gap.
  3. Inspections: Buyer waives the inspection or buyer won’t negotiate any inspection items under $10,000. This means that if there is a bad furnace, and it’ll cost $7000, the buyer won’t ask the seller to replace it, but will take it on themselves after closing.
  4. Earnest money forfeited to seller if the purchase agreement doesn’t close.
  5. Buyer will cover some of the seller’s closing costs. Buyer shall pay up to $20,000 of seller’s closing costs. Meaning that the sale price could be potentially lower and still come out ahead because of the lower closing costs the seller has to cover.

There are many other unique things that can be done to help a buyer in multiple offers. These are just some examples of what we were using in a very, very strong sellers market.

Contact   Info

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7700 France Ave S #230
Edina, MN 55435
(952) 915-2252 (direct office)
(952) 884-8404 (office front desk)

Steven Hong, REALTOR
Team lead
Old Home Certified
(612) 990-9009

Each office independently owned and operated.  All information is deemed reliable but not guaranteed, and should be independently reviewed and verified. Equal opportunity housing. 

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